Montana Auditor Responds to Fraudulent AI Investment Scheme

Missoula, MT (KGVO-AM News) - The Montana Commissioner of Securities and Insurance, the Texas State Securities Board, and the Alabama Securities Commission all joined forces on Tuesday to stop a fraudulent artificial intelligence investment scheme.

KGVO News spoke to Montana State Auditor and Insurance Commissioner Troy Downing just after the legal actions were filed.

It's an AI Scheme Trading at High-Speed Promising High Profits

“We're starting to see more and more of these crypto companies go south,” began Commissioner Downing. “What's happening is that there are fraudsters that are just taking advantage of this desire for something new, and the problem is that many are unregulated and many of them are failing. The one that we have out there right now is called Yield Trust AI.”

Downing explained how the perpetrators lured investors into the scheme by touting the artificial intelligence factor and the sheer speed of the investments, and the promised profits.

“They promised to use artificial intelligence to do really fast trades in cryptocurrencies that we're faster than humans and smarter than humans,” he said. “They were guaranteeing sometimes two or three percent returns a day, and they were raising money, but unfortunately, none of it was true. It turned out that these folks were not making money and so what they did to pile upon that they did another offer to try to raise money to pay back the losses from the earlier investors; in other words, a Ponzi scheme.”

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Downing Immediately Filed a Cease and Desist Order Against the Company

Downing said he acted quickly to try to put a stop to the fraudulent activity and to fine the perpetrators.

“We did a multi-state action,” he said. “We got together with the State of Texas and the State of Alabama and we did a cease and desist order. We are right now fining them $100,000 and prohibiting them from continuing to operate in those three states.”

The caveat to Downing’s legal action is that the criminals are overseas, and there is no way to enforce the penalties unless they return to the United States.

The Crooks Might Get Away Because They're Located Overseas

“Basically, we’re just going to stop them from doing business in Montana,” he said. “We're putting them on notice; we're getting out press releases; we're talking on shows like yours to let people know that this is going on so don't invest in this. But the big part is just getting the message out there that you really, really need to do your due diligence when thinking about investing in any of these schemes. Unfortunately, the likelihood of us actually getting that $100,000 fine from the individual named in this action or the company is pretty slim, unfortunately. But it's the only tool that we have.

Downing’s advice is as old as history; 'let the buyer beware'.